The Cy-Fair ISD board of trustees discussed a potential voter-approved tax rate election, or VATRE, and $1.63 billion bond election for the Nov. 3 ballot during the Aug. 6 work session.
What’s happening
CFISD’s proposed tax rate is $1.1569 per $100 of property value which would trigger a VATRE, and Chief Financial Officer Karen Smith said the district would receive $103 million in revenue from the increase.
Spanning from fiscal year 2024-25 into FY 2026-27, the district has made multiple budget cuts totaling $94.4 million in savings, Smith said. However, the projected shortfall for FY 2026-27 is $80.9 million, as previously reported by Community Impact.
Smith said contributors to the projected shortfall include:
- State funding not keeping up with inflation
- CFISD’s 20% local optional homestead exemption
- Decline in School Health and Related Services revenue
- Underfunded state mandates
- Decrease in enrollment and average daily attendance
She said the district's current options for generating additional revenue include legislative action, removing the local optional homestead exemption, or LOHE, and increasing the maintenance and operations, or M&O, tax rate through a VATRE.
The options
Smith said state funding formulas do not account for the loss in property tax revenue from offering the 20% LOHE, which the district cannot reduce until Jan. 1, 2028. Smith said the district has no plans to reduce or eliminate the LOHE. Superintendent Doug Killian said he has reached out to legislators to try and remedy the gap in revenue, but they haven’t found a solution yet.
“As far as advocating for addressing the penalty from our local optional homestead exemption, we’ve been fighting that for as long as I can remember,” board of trustees president Julie Hinaman said.
Smith said the only viable option to produce meaningful revenue at the current moment is to consider increasing the M&O tax rate.
Texas school districts have the ability to raise a portion of their tax rate by 17 cents over the state threshold. District officials confirmed during the May 7 work session that the board was allowed to raise the maintenance and operations tax rate by 5 cents without voter approval, but a VATRE is required to access the additional 12 cents.
Some context
Even with CFISD’s proposed property tax increase their rate is still lower than surrounding districts, and the over-65 population would not see any changes to their current tax rate.
In order to call a VATRE, the district was required to perform an efficiency audit and the board received those results during the Aug. 6 work session. The audit found that CFISD spends a higher percentage of their budget on instruction, and a lower percentage on administration in relation to other size-comparable districts in the state.
Trustee Cleveland Lane said by looking at the numbers the district is working as efficiently as possible right now.
What they’re saying
Trustee Christine Kalmbach said she will continue advocating at the state level to close the funding gap and make the LOHE whole.
“My heart goes out to our community, because our LOHE has helped make such a difference in people being able to live in Cy-Fair, and being able to afford to live in Cy-Fair,” Kalmbach said.
Without any changes to revenue, Killian said transportation would be the first budget cut. Hinaman said the community has made it very clear that they value the district's transportation services. Hinaman said CFISD spends $60 million on transportation since state funding formulas for buses have not changed since the ‘80s.
“Calling a VATRE is asking the community to reflect [on] those values, and to make an investment so that we can continue to provide that service,” Hinaman said. “We have to control our own destiny.”
In other news
The board of trustees also discussed a potential $1.63 billion bond election broken into four propositions. The proposed proposition structure includes:
- $1.3 billion: school building improvements, and purchase of new and retrofitting old school buses
- $256 million: acquisitions and updates of technology
- $60.8 million: district stadium facility improvements
- $20.1 million: improvement of district swimming facilities
Chief Operations Officer Matt Morgan said the Long Range Planning Committee originally presented the bond proposition to the board in February 2026. Morgan said that even though ballot language states the bond is a property tax increase, the debt service tax rate is projected to decrease 3 cents.
Looking ahead
The board of trustees are slated to vote on the proposed VATRE and bond election during the upcoming regular meeting following a public hearing regarding the proposed tax rate of $1.1569 per $100 of property value.
The board of trustees plan to meet Aug. 10 at 6 p.m. in the Mark Henry Administration Building Boardroom located at 11440 Matzke Road, Cypress for a regular meeting. A livestream option can be found here.
